Thursday, October 9, 2014

Fundamental Analysis for USD on 9th October 2014

Assalamualaikum,

Fed Officials Saw Global Slowdown Among Risks to Outlook

Federal Reserve policy makers last month worried that slowing global growth and a stronger dollar posed risks to the U.S. economy as they decided to maintain a pledge to keep interest rates low for a “considerable time.”

A number of officials said the U.S. expansion “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of the Sept. 16-17 Federal Open Market Committee meeting released today in Washington.

Stocks rose, sending the Standard & Poor’s 500 Index up the most this year, and the dollar weakened as investors speculated that caution over the economic outlook would lead the Fed to keep interest rates near zero for longer.

 The IMF yesterday cut its global growth forecast for 2015 and warned about the risks of rising geopolitical tensions. 

“Not only are they not ready to raise rates, they don’t even want people to think they’re ready to raise rates, so it’s not even on the radar screen,” said Ward McCarthy, chief financial economist at primary dealer Jefferies Group LLC in New York.

 Fed Leery Guidance Changes Might Be Misread

  Federal Reserve officials discussed altering their guidance on the likely path of interest rates at their September meeting, but decided against making any changes because of concerns they might be misinterpreted, minutes of the meeting showed Wednesday.

The Fed statement released three weeks after the meeting repeated that officials expected they would keep short-term interest rates near zero for a “considerable time” after the end of their bond-buying program.

A number of officials noted that changes to the guidance “might be misinterpreted as a signal of a fundamental shift in the stance of policy that could result in an unintended tightening of financial conditions,” the minutes said.


Monday, October 6, 2014

Weekend Fundamental and Technical Analysis For EUR on 6th Oct 2014

Assalammualaikum,

Below is my analysis for EURO

          For this week, there are not many high impact news expect Draghi Speak which is on Thursday  9th October. As for Fundamental Indicator, CPI data significantly shows deflation for overall Euro and specifically on Spanish which is negative CPI data. For job data, unemployment for Euro is still high and there is no significant trend the unemployment trend is reducing. Italian unemployment data show significantly high. Current interest rate is the lowest in a decade.

          As for technical analysis, currently the price is hold at psychological number 1.2500. I'm expecting the price will be retraced or ragging before it dip further. The entry strategy for now will be sell from bounce from any significant resistance.

1. News Calendar


 
2. Fundamental Indicator

 i) Inflation / CPI





 ii) GDP
 


 iii) Trade Balance / Current Account






  iv) Jobs / Earning











 v) Interest Rate
  


 3. Important News / Announcement




4. Technical Analysis 

 

Weekend Fundamental and Technical Analysis For GBP on 6th Oct 2014

Assalamualaikum,

Analysis as below.

           Interest Rate and MPC Statement will likely to move the market this week which is on Thursday 9th October. In general fundamental indicator still have not shown economy recovery. Inflation rate still below 2%, trade balance is still negative and average earning still not shown significant improvement even though people of getting job are improved. BOE is watching inflation rate and wages in decision to increase interest rate.

         As for technical analysis, major trend is still bearish and there is yet sign of reversal at the moment. As of now, I'm still bearish for GBPUSD and will execute sell from bounce at any significant resistance.


1. News Calendar


2. Fundamental Indicator

    i) Inflation


     ii) GDP
 

    iii) Trade Balance / Current Account




   iv) Jobs / Earning



  v) Interest Rate



3. Important News / Anouncement

Cable Says Pound Overvalued 10%-15%, Holding Back Exports 

Business Secretary Vince Cable said Britain’s economic growth is being hampered by stalled exports, partly as a result of the high value of sterling.

“Arguably, the pound is overvalued by 10 to 15 percent on a trade-weighted basis,” Cable told a side meeting yesterday at his Liberal Democrat party’s annual conference in Glasgow, Scotland.



Britain to take the crown as the fastest growing economy of developed nations

But the accolade, set to be announced at the annual meeting of the IMF in Washington, is unlikely to move interest rates back home.

Despite two members of the nine-strong rate-setting Monetary Policy Committee already voting for a hike, analysts expect rates to be held.

 The Bank of England expects the UK to grow at 3.5 per cent this year - the fastest rate of any developed nation.

Economists warn the recovery is losing momentum - which may also prompt the Bank to hold off raising rates just yet.


4. Technical Analysis






Monday, September 29, 2014

Weekend Fundamental and Technical Analysis for GBP - 28 Sept 2014

Assalammualaikum,

Fundamental and Technical Analysis for GBP as below.

1. News Calendar
 No market movers news in this week.



2. Fundamental Indicator
In summary, based on the data below, there is significant correlation between Manufacturing PMI, CPI and currency GBP/USD which moving downward for 3 consecutive month. However, GDP and unemployment data shows improvement which suggest the economy is improving.

Therefore, the data suggest that long term trend is bullish and mid term trend is bearish.

i) Purchasing  Managers' Index data (PMI)




 ii) GDP data

iii)Unemployment data

iv) CPI data

v) Wages data - a leading indicator for CPI
 


3. News

UK August public finances show further slippage, income tax weak

Even so, economists said a big improvement would be needed this month for the government to get back on track and the chances of extra spending or tax cuts before the election in May 2015 seemed to be slipping away.

Britain's very weak pay growth helped limit annual growth in income tax receipts and social security payments to just 1.6 percent in August. In the tax year to date, income from those sources was 0.6 percent lower than a year earlier.

4. Technical Analysis
 Technical analysis below suggest to Sell from bounce from strong resistance such as trendline or physcological number 1.6500.

 

Weekend Fundamental Analysis for USD - 28 Sept 2014

Assalammualaikum,

Fundamental analysis for US as below.

1.News Calendar
Expected news which will move the market during US session.




2. Fundamental Indicator
Long Term trend shows US economy is strengthen. FED currently is looking into job data to gauge the its economy recovery.

i) Job Data




ii) GDP data

iii) Home Sale


3. News
In summary, all news looks hawkish for USD.

Economy in U.S. Grew 4.6% in Second Quarter, Most Since 2011

The U.S. economy expanded in the second quarter at the fastest rate since the last three months of 2011 as companies stepped up investment and households boosted spending.

Busier assembly lines at the nation’s factories and job growth that’s kept Americans spending indicate companies are a bit more upbeat about the prospects for demand. As the world’s largest economy and labor market improve, Federal Reserve policy makers are debating how much longer to keep interest rates near zero.

Consumer spending should benefit from strengthening labor conditions and improved financial conditions,” while business investment should also continue, she said.

Jobless Claims in U.S. Climbed Less Than Forecast Last Week

Applications for unemployment benefits in the U.S. increased less than forecast last week as an improving economy prompted employers to retain staff.


Sales of New U.S. Homes Surged in August to Six-Year High

New-home sales in the U.S. surged in August to the highest level in more than six years, a sign that the housing recovery is making progress.

The housing market is improving in fits and starts this year amid slow wage growth and tight credit conditions. Sustained improvement in the job market will be needed to push up pay and sustain a stronger recovery.

Borrowing costs remain historically low even as Federal Reserve policy makers signal they’ll start to boost their benchmark interest rate next year.


Not So August: Builders, Economists Still See Mediocre New-Home Sales in 2014

New-home sales in August reached the highest annualized pace since 2008. But many builders and economists still expect sales for this year to underwhelm, ultimately either matching or only slightly exceeding last year’s level


DUDLEY: Don’t Pay Too Much Attention To The Dot Plot

Dudley said that to hawks on FOMC, he said that the Fed has a dual mandate, and that monetary does work with a lag: “you wouldn’t put all your weight on inflation side just as you wouldn’t put all your weight on the labor side.”

Dudley said that with respect to interest rates at the “zero lower bound”: “That’s not really a particularly comfortable place to be.”



Sunday, September 28, 2014

Weekend Fundamental and Technical Analysis For EURO on 28 Sept 2014

Assalammualaikum,

Fundamental Analysis For Euro As below

1. News Calendar

Market is expected to move on Thursday after ECB Press Conference.


2. Fundamental Indicator
 Based on the fundamental indicator below Euro is still weak and not yet recovered.






3. Related News

 Draghi Sees ECB Becoming More Active in Fight for Euro

 The European Central Bank president said a planned asset-purchase program shows that policy makers will steer the size of the institution’s balance sheet to avert deflation.

Unacceptably high unemployment and continued weak credit growth are likely to curb the strength of the recovery. The risks surrounding the expected expansion are clearly on the downside.”

Even after cutting borrowing costs for banks to record lows and offering long-term loans, Draghi is struggling to persuade them to take more ECB cash to finance lending to the real economy. In contrast to other major central banks, the ECB’s assets have shrunk by a third since 2012.

Economic growth in the euro area came to a halt in the second quarter and Draghi said yesterday that recent indicators have given no indication that the “sharp decline” in economic activity in the region has stopped .


 4. Technical Analysis
 - Entry to apply Sell from bounce from any trendline.